Insight into Offshore Wind Industry in China
The recent developments in China on the policy front, local stakeholder ambitions, and project developments indicate a shift towards growth in the country’s offshore wind market, according to a new report by Quartz+Co and MEC Intelligence.
In the past five years, offshore wind has become the fastest growing clean energy technology in the Northern Europe.
In 2010, the Chinese Government set a target of 30GW of installed offshore wind capacity by 2020. The target is widely considered to be ambitious having in mind that the offshore wind industry is at a nascent stage, with only few projects installed so far, along with the fact that there is a lack of a clear plan and approval mechanism.
Activities over the last year, however, show that the industry is beginning to enter into a growth phase. Offshore wind has recently been given a priority status. The Chinese Government has taken the first step towards rectifying the problem of low tariffs ranging between EUR 0.08-0.09/kWh in the first concession bidding, by trying to discover benchmark prices through direct approvals. It is expected that competitive benchmark prices will be introduced to upsurge the pace of development.
Furthermore, the Government has extended its knowledge from onshore wind and has introduced a grid connection approval mandate before construction begins, so as to avoid curtailment due to a lack of grid connection. Most importantly, long standing projects have been granted approval and 628 MW of projects are already under construction, and about 3.4 GW of projects have been approved in Hebei, Jiangsu, Shanghai, Zhejiang Fujian & Guangdong.
Developers, turbine component suppliers, foundation suppliers, and installation equipment manufacturers either underestimate the challenges and timelines or are researching new technologies compatible with local and international requirements.
This creates an opportunity for experienced international players to chalk out a measured strategy and develop co-operative business models along with the right timing to maximise the opportunity offered by the offshore wind market in China.
Press release, February 12, 2014; Image: clypg